2009 has been a turbulent year for the vehicle tracking market which has seen many tracking companies fall by the wayside as the recession and more specifically the credit crunch hit. But what will be the legacy of 2009 and what does 2010 hold for the industry.
Lease Financing Availability
One of the biggest problems to affect the vehicle tracking sector in 2009 was the difficulty in obtaining lease finance for customers wanting to buy tracking systems. Lease finance spreads the cost of a tracking system over the duration of the contract period and is often the preferred way to buy vehicle tracking, in most cases leasing requires no capital outlay and offers return on investment from the word go.
The availability of business leasing is improving, especially in the SME sector but not for tracking suppliers. www.TrackCompare.co.uk surveyed the major lease underwriters and found that although the lending criteria for potential customers has relaxed, the criteria for vehicle tracking providers has not and many underwriters are limiting their activities to ‘the big 5’ tracking companies.
The underwriters have reported significant losses in the vehicle tracking sector and now see it as a high risk market as should the tracking company go under, the tracking system becomes unusable and there are is little tangible value that can be recovered.
Customer Confidence Damaged
One of the biggest casualties of 2009 are without doubt the customers that bought vehicle tracking systems that were subsequently switched off when their parent companies closed. Many customers have been left with debts of thousands with no tracking system to use.
Tracking horror stories have spread like wildfire and customer confidence in tracking systems and their providers has been seriously affected. Efforts by tracking companies to offer ‘no risk’ financing systems have gone some way to restoring confidence but often means higher costs for the customer and their long term feasibility is in some cases questionable.
What Does 2010 Hold For Tracking
The vehicle tracking market is expected to double by 2012 which is great news. The tracking sector does however have a big job to do in restoring the confidence in potential buyers and suppliers should expect them to be more cautious and meticulous in their choice of partner.
The job of the smaller players and new companies in the tracking market will be more difficult in 2010, being unable to offer lease finance will make selling to companies who need a monthly payment option harder, unless they have enough financial backing to underwrite the upfront costs themselves.
This will inevitably affect choice and competition for customers, tracking pricing has fallen significantly in recent years due in part to cost reductions in technology and data but the key driver has without doubt been competition.
Despite this, from the perspective of potential tracking customers there has never been a better time to consider tracking. There are more products, more finance options and more competition in the market than ever before. By choosing the right tracking partner a business can revolutionise its operation overnight and the massive benefits that vehicle tracking systems can bring should not be overshadowed by the problems of 2009.